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THE
STATE BANK OF VIETNAM
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SOCIALIST
REPUBLIC OF VIETNAM
Independence- Freedom Happiness
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No.
111/2004/QD-NHNN
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Hanoi,
February 2, 2004
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DECISION
ON THE ISSUANCE OF THE REGULATION ON THE AUCTION OF THE
GOVERNMENT'S FOREIGN CURRENCY BONDS AT THE STATE BANK
THE GOVERNOR OF THE STATE BANK
- Pursuant to the Law on the
State Bank of Vietnam No. 01/2997/QH10 dated 12 December, 1997 and the Law on Credit
Institutions No. 02/1997/QH10 dated 12 December, 1997;
- Pursuant to the Law on the amendment, supplement of several Articles of the
Law on the State Bank of Vietnam No. 10/2003/QH11 dated 17 June, 2003;
- Pursuant to the Decree No. 86/2002/ND-CP dated 05 November, 2002 of the
Government providing for the function, assignment, authority and organizational
structure of the ministries and ministerial level agencies;
- Pursuant to the Decree No. 141/2003/ND-CP dated 20 November, 2003 of the
Government on the issuance of Government Bonds, Bonds guaranteed by the
Government and Bonds of local Government;
- Pursuant to the Decision No. 182/2003/QD-TTg dated 5 September, 2003 of the
Prime Minister on the issuance of Government Bonds for investing in several
national important traffic, irrigation works
- In agreement with the Ministry of Finance and upon the proposal of the
Director of Credit Department;
DECIDES:
Article 1.
To issue in conjunction with this Decision the
Regulation on the auction of Government's foreign currency Bonds at the State
Bank.
Article 2.
This Decision shall be effective after 15 days since
the date of its publication in the Official Gazette.
Article 3.
Director of Administrative Department, Director of Credit
Department, Director of the Banking Operation Department, Heads of units of the
State Bank, General Managers of the State Bank branches in provinces, cities
under the central Governments management, Chairperson of the Board of
Directors, General Directors (Directors) of credit institutions shall be
responsible for the implementation of this Decision.
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FOR
THE GOVERNOR OF THE STATE BANK
DEPUTY GOVERNOR
Phung Khac Ke
REGULATION
ON THE AUCTION OF GOVERNMENT'S FOREIGN CURRENCY BONDS AT THE
STATE BANK
(Issued in conjunction with the Decision No. 111/2004/QD-NHNN dated 2
February, 2004 of the Governor of the State Bank)
Chapter I.
GENERAL PROVISIONS
Article 1.
Governing scope
This Regulation provides for the
auction of Government's foreign currency Bonds at the State Bank.
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In this Regulation, following
terms shall be construed as follows:
1. Auction of Government's
foreign currency Bonds at the State Bank shall mean that the State Bank acts as
an agent of the Finance Ministry to issue and make payment of Government's
foreign currency Bonds, under the wholesale method, with other members in the
primary market through the auction.
2. Competitive interest rate
auction shall be a form of interest auction between members in order to
determine the winning interest rate and winning volume of the members
participating in the auction session.
3. Uncompetitive interest rate
auction shall be a form of volume auction between members in order to determine
the winning volume in the auction session. The interest rate applicable to
uncompetitive interest rate auction shall be the winning interest rate in the
competitive interest rate auction.
4. Government's foreign currency
Bonds that are issued in at par form shall be Bonds that are sold at the price
equivalent to their face value and the payment of their principal is made one
time at the maturity; their interest is paid periodically on an annual basis on
the issue date of the Government Bonds.
Article 3.
Auction principles
1. Publicity and equality in
respect of the rights and obligations of members;
2. Secrecy of the tendered
information of members and the ceiling interest rate (if any).
Article 4.
Auction form
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1. Competitive interest rate
auction;
2. A combination between the
competitive interest rate and the uncompetitive interest rate.
The form of auction in each
session shall be specifically decided upon by the Ministry of Finance.
Article 5.
Conditions for participating in the auction of Government's foreign currency
Bonds
Credit Institutions, which are
set up and operating in accordance with the Law on Credit Institutions, shall
be permitted to take part in the auction of Government's foreign currency Bonds
upon their satisfaction of following conditions:
1. They are permitted to engage
in foreign exchange activity;
2. They maintain their foreign
currency accounts at the Banking Operation Department.
Article 6.
Responsibilities of the Treasury Bills auction committee
The inter-ministerial Treasury
Bills auction committee of the State Bank and Ministry of Finance shall be
responsible for the organization, supervision of the auction operation of
Government's foreign currency Bonds at the State Banks.
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SPECIFIC PROVISIONS
Article 7.
Member recognition
1. The State Bank shall consider
for granting a written membership recognition to Credit Institutions, which
have fully satisfied conditions as stipulated in Article 5 of this Regulation
and submitted a written request for participating in the auction of
Government's foreign currency Bonds and the list of persons authorized to sign
documents relating to the participation in the auction of Government's foreign
currency Bonds at the State Bank in accordance with the sample form No. 01/TPCP
attached hereto.
2. The State Bank shall revoke
the membership recognition in following cases:
a. Credit Institutions can no
longer satisfy conditions as provided for in Article 5 of this Regulation;
b. Credit Institutions are
placed in the special control status.
Article 8.
Auction method
1. Direct auction: Members shall
directly bid at the State Bank of Vietnam.
2. Online Auction: The State
Bank shall grant a number code, key code and signature code to persons authorized
by members for their performance of on-line transactions.
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1. The State Bank shall, based
on the request for the issuance of Government's foreign currency Bonds by the
Ministry of Finance, give notice of the auction to members at least 2 working
days prior to the date of auction.
2. The State Bank (Banking
Operation Department) shall send the notice of auction in following forms:
a. Through the computer network
to members, which are directly connected to the State Bank's network;
b. Via fax to members, which are
not directly connected to the State Bank's network and the designated branches
of the State Bank. In case of members, which are not directly connected to the
State Bank's network and do not register their participation in 5 consecutive
auction sessions, the direct notice via fax by the State Bank to these members
shall be terminated in following auction sessions and only resumed when these
members register their participation in the auction.
c. Announcement in several mass
media.
3. The content of the notice of
Government's foreign currency Bonds auction of the State Bank shall comply with
the Form No. 02/TPCP attached.
Article 10.
Auction registration
1. On the auction date, members
shall carry out the auction registration in accordance with the Form No.
03/TbPCP attached.
2. Contents stated in the
written registration by members for auction shall be provided for as follows:
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- The Registration Form No.
03/TPCP shall be applicable to the form of competitive interest rate auction
and the combination of competitive interest rate auction and uncompetitive
interest rate auction. Auction participants shall fill in suitable part
depending on the form of auction participation.
- In the sessions of auction
where the combination auction between competitive interest rate auction and
uncompetitive interest rate auction is carried out, members can register either
competitive interest rate auction or uncompetitive interest rate auction or
both.
b. Bidding volume
- Participating members shall
not be subject to the minimum bidding volume, but it must be rounded to the
currency unit of the Bonds. In case of a combination auction, the maximum
bidding volume of each participating member in the uncompetitive interest rate
auction shall be equal to 30% of the expected issue;
- The volume registered at each
level of interest rate in the competitive interest rate auction and the total
volume shall be stated both in words and in number. The auction registration
forms shall be rejected in case where the volume in words and in number are
different.
c. Interest rate
- Each registration form shall
be permitted to register 5 levels of bidding interest rate for the case of
competitive interest rate auction. Interest rate at each auction level shall be
calculated as the percentage per year (%/year) and up to 2 decimal digits;
- In case of an uncompetitive
interest rate auction, the registration form shall register only the bidding
volume, not register levels of interest rate.
3. The auction registration form
(the original) sent to the State Bank must be signed by the legal
representative of the member, who has registered his signature with the State
Bank, and be put in a sealed envelope. In case where the registration form is transmitted
through the computer network connected to the State Bank, provisions on
information security of the State Bank shall be complied with.
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Article 11.
The way to send the registration form
1. Auction participants shall be
entitled to send a registration form for each term of the bonds in each auction
session.
Within the time allowed for the
submission of the registration forms, members may change any content of the
registration form by submitting a new form and canceling the old one through
the computer network. In case where the bid offer is dropped directly in the
box at the State Bank (Banking Operation Department or the designed branch of
the State Bank), the latest offer shall be appraised
2. The registration forms shall
be dropped directly in the box at the State Bank or transmitted through the
computer network to the Banking Operation Department in compliance with
provisions on the information security of the State Bank.
3. The box shall be locked by 2
locks, keys of which shall be kept by 2 competent officers, each person keeps
one key. In case where the auction registration is made through the computer
network, the key code shall be kept by a competent person to ensure the
confidentiality of the registration forms before the auction opening.
Article 12.
Auction opening
1. Auction participants shall
submit registration forms to the State Bank prior to 13 o'clock of the auction opening
date. The time for auction opening shall begin from 13.30 o'clock of the
auction date in the witness of the Committee for Treasury Bills auction.
2. The settlement unit of the
State Bank (Banking Operation Department or the designated branch of the State
Bank) shall verify the validity of auction registration forms (by two checking
officers, who sign separately for confirmation on the auction registration
forms, the head of the settlement unit shall sign for confirmation). Auction
registration forms and the auction registration levels that do not comply with
applicable provisions shall be rejected.
After the rejection of invalid
auction registration forms and invalid auction registration levels, the
designated branch of the State Bank shall transmit through the network and send
via fax (according to the security regime) the consolidated list of offers by
form of competitive and uncompetitive interest rate and the registration forms
of participants to the Banking Operation Department to carry out the centralized
offer appraisal.
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Article 13.
Offer appraisal
1. In case of competitive
interest rate auction:
Volume of winning Bonds shall be
considered and selected in accordance with the bidding interest rates from low
to high up to the ceiling interest rate; If the volume of bonds tendered at the
highest winning interest rate exceeds that expected to issue in the competitive
form, the volume of winning bonds shall be allocated to each bidder
proportionately to the volume of bonds tendered at that interest rate.
The highest winning interest
rate shall be the issue interest rate applicable generally to every
auction-winning subject.
2. In case of the combination of
competitive interest rate with uncompetitive interest rate in an auction
session
a. Determination of the volume
of competitive interest rate auction and uncompetitive interest rate auction:
- In case where the volume
offered for the uncompetitive interest rate auction by participants in an
auction session is lower than or equal to 30% of the volume of Government Bonds
expected to issue, the volume of the uncompetitive interest rate auction shall
be equal to the volume offered for the uncompetitive interest rate auction by
participants. The volume of the competitive interest rate auction shall be
equal to the difference between the volume of Bonds expected to issue and the
volume of the uncompetitive interest rate auction.
- In case where the volume of
the uncompetitive interest rate auction of participants in an auction session
is higher than 30% of the volume of Government Bonds expected to issue, the
volume of the uncompetitive interest rate auction shall be equal to 30% and the
volume of the competitive interest rate auction shall be 70% of the volume of
Government Bonds expected to issue.
b. Determination of the winning
interest rate and winning volume of participants
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- In case where the volume
offered for the uncompetitive interest rate auction is higher than 30% of the
volume expected to issue, the State Bank shall allocate the winning volume to
participants proportionately to the volume offered by each participant.
- If the winning interest rate
of the competitive interest rate auction cannot be determined in a session,
that auction session shall be considered as not having the winning result.
c. The auction result should be
signed for confirmation by legal representatives of the Ministry of Finance and
the State Bank in the Treasury Bills auction committee.
Article 14.
Determination of payable annual interest of the Government's foreign currency
Bonds
The formula for determining the
payable annual interest of the Government's foreign currency Bonds (to be paid
on the annual issue date) shall be as follows:
L
= MG x Ls
L: is the interests to be
paid annually,
MG: is Face value of the
Government's foreign currency Bonds, and
Ls: is the winning
interest rate of Government Bonds (as a percentage per annum).
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After the auction result is
determined by the Treasury Bill auction committee, the Banking Operation
Department shall submit a report of the auction result (in writing) to the
Minister of Finance, the State Bank's Governor, the State Treasury and related
departments of the State Bank, and send, at the same time, by fax or transmit
through computer network (if any) the auction result to participants in
accordance with Form No. 04/TPCP attached and announce it in several mass
media.
Article 16.
Payment of the Bonds purchase and accounting of Government's foreign currency
Bonds.
1. Based on the auction result
notice of the State Bank, winning participants shall make full payment of the
Bonds purchase to the State Bank (the Banking Operation Department) on the
issue date.
2. The issue date of Bonds shall
be the second working day from the auction date. The State Bank shall credit
the account "Government Bonds" of participants who have won the
auction and credit the account "foreign currency deposit" of the
State Treasury maintained at the Banking Operation Department the amount
received from the sale of Bonds on the issue date.
3. In case the State Bank does
not receive the amount to be payable by winning participants on the issue date
of Bonds, it shall automatically deduct the account "foreign currency deposit"
of winning participants at the State Bank of the respective value and transfer
it to the State Treasury. If the account "foreign currency deposit"
is still not enough to cover this payment, the unpaid winning volume shall be
canceled. A fine equivalent to 5% of the unpaid winning volume, which is
canceled, shall be deducted by the State Bank to transfer to the State
Treasury. In case where the account "foreign currency deposit" of
participants does not have any balance or the balance is not sufficient to
cover this 5% fine, the State Bank shall make this deduction whenever there is
any balance on this deposit account until the stipulated fine is sufficiently
collected.
Article 17.
Payment of the principal and interest of Bonds at the due date
1. The annual payment of
interest, the payment of the principal, interests in the year, where the
Government Bonds become due (the amount of the principal, interests of
Government Bonds shall be rounded to 2 decimal digits of the denominated
currency unit).
One working day prior to the
date of annual interest payment, the date of payment of the principal,
interests in the year, where the Government Bonds become due, the Ministry of
Finance (the State Treasury) shall transfer the payable amount of Bonds to the
State Bank (the Banking Operation Department) in the payable foreign currency.
If the State Bank fails to receive the transfer document from the State
Treasury by the payment date, it shall automatically deduct from the account
"foreign currency deposit" of the State Treasury to make payment to
Bond owners (if the foreign currency required for payment is not available in
the account "foreign currency deposit" of the State Treasury, the
State Bank shall convert the account's foreign currency to the required one at
the foreign currency selling rate of the State Bank applicable at the time of
the transaction).
2. The State Bank shall pay the
annual interests, the principals and interests of the year, where the
Government Bonds become due, to the owners of Government's foreign currency
Bonds at the payment date of the Bonds. In case where the due date of the
payment of annual interests, principals and interests of the year, where the
Government Bonds become due, falls on the weekend, holidays, the payment shall
be made on the following working day.
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Chapter
III.
ORGANIZATION OF THE
IMPLEMENTATION
Article 18.
Responsibilities of units of the State Bank
1. The Banking Operation
Department shall be responsible
a. to consider for issuance and
revocation of membership recognition to subjects participating in the auction
market of Government's foreign currency Bonds;
b. to grant number code, key
code to members who carry out transactions through computer network and
signature code to the representative person, who is authorized by the member to
participate in transactions;
c. to implement the direction of
the Treasury Bills auction Committee on the notification of Government's
foreign currency Bonds auction, the receipt of auction registration forms,
organization of the offer appraisal and notification of auction result to
participants and the designated branches of the State Bank in accordance with
applicable provisions of this Regulation;
d. to prepare the report on the
auction results and submit it to the Governor of the State Bank and the
Minister of Finance, and send, at the same time, to the State Treasury, Credit
Department, Monetary and Policy Department, Finance- Accounting Department;
dd. to receive the Bonds payment
from winning participants and make payment of annual interest, interests and
the principals in the year, where the bonds become due to the owners of Bonds.
To carry out the Bonds deposit of participants;
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g. to issue the Procedure of
auction operation of the Government's foreign currency Bonds on the basis of
provisions of this Regulation (Director of the Banking Operation Department).
2. Finance- Accounting
Department shall be responsible for the provision of guidance on the accounting
regime of auction operation of the Government's foreign currency Bonds.
3. Banking Information
Technology Department shall be responsible for the design of a software program
for the auction of the Government's foreign currency Bonds for the program
installation and network connection in order to ensure the safety and
confidentiality of the operation.
4. Designated branches of the
State Bank shall be responsible
a. To verify local members'
competency, to give notice to the Banking Operation Department for its
consideration, revoke the membership recognition of local members who do not
fully satisfy conditions for participating in the auction market of the
Government's foreign currency Bonds.
b. To receive the auction
registration form from local auction participants.
c. To open the auction session
and consolidate auction offers of local auction participants (after the
rejection of invalid auction offer and auction level) and transmit them through
the computer network to the Banking Operation Department for offer appraisal.
To state the confidential code in the Consolidated List, registration forms and
send them by fax to the Banking Operation Department to keep in record.
Article 19.
Amendment, supplement
The amendment, supplement of
this Regulation shall be decided upon by the Governor of the State Bank.
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Form No. 01/TPCP
NAME
OF THE INSTITUTION
No.: ..
SOCIALIST
REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
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.............,
date...............
REQUEST FOR THE PARTICIPATION IN THE AUCTION OF
GOVERNMENT'S FOREIGN CURRENCY BONDS
To:
The State Bank of Vietnam (Banking Operation Department)
Name of the institution:
..........................................................................................................
Address:...............................................................................................................................
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Telex:..............................................................
Telefax:.........................................................
"Foreign currency
deposit" account:
Pursuant to the conditions for
participating in the auction of the Government's foreign currency Bonds stated
in the Regulation on the auction of the Government's foreign currency Bonds at
the State Bank issued in conjunction with the Decision No. ......... of the
Governor of the State Bank, the bank........... has fully satisfied required
conditions and requests for participating in the auction market of the
Government's foreign currency Bonds and commits to:
- Comply with all provisions in
the Regulation on the auction of the Government's foreign currency Bonds at the
State Bank
- Provide the State Bank with
all information concerning its Government's foreign currency Bonds
transactions;
We would like to recommend the
list of officers who have full competence to sign transaction documents:
Full
name
Position
The
first signature
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The first person
The second person
The third person
We would like to request the State
Bank to consider issuing the membership recognition and required procedures so
that we can take part in the auction of the Government's foreign currency
Bonds.
HEAD
OF THE INSTITUTION
(Sign and seal)
Form No. 02/TPCP
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SOCIALIST
REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
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No.:
..
.............,
date...............
NOTICE OF THE AUCTION OF THE GOVERNMENT'S FOREIGN
CURRENCY BONDS
To:
According to the Notice of the
auction of the Government's foreign currency Bonds No. ......... dated
............. of the Treasury Bill auction Committee, the State Bank gives
detailed notice of the auction of the Government's foreign currency Bonds .......
as follows:
- Types of Government Bonds:
- Forms of Bonds:
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- Payment period of interests
and principal of Government Bonds:
- Auction form:
- Volume expected to issue:
- Auction date:
- Date of auction result
announcement:
- Date of issue and payment of
the Bond purchase:
- Maturity date:
- Payment date of annual
interests:
- Time limit for submission of
auction offer:
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- Payment place of periodical
interests and principal, interests of due Government Bond:
To:
- Participants in the auction market of
GBs
- Designated branches of SBV
- Kept at BOD
AUTHORIZED
BY THE GOVERNOR OF THE STATE BANK
DIRECTOR OF THE BANKING OPERATION DEPARTMENT
(Sign, seal or electronic signature)
Form No. 03/TPCP
NAME
OF THE INSTITUTION
No.: ..
SOCIALIST
REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
----------------------
Auction registration the
..........time
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REGISTRATION OF THE AUCTION OF THE GOVERNMENT'S FOREIGN
CURRENCY BONDS
To:
the State Bank
Pursuant to the notice of the
State Bank of the organization of the Government's foreign currency Bonds
auction on (day/month/year)........................., the Bank with foreign
currency account maintained at .................... would like to register its
participation in the auction of the Government's foreign currency Bonds as
follows:
1. Registration for
uncompetitive interest rate auction:
Registered volume: (in
number)...............................................................................................
(in
words)..............................................................................................................................
2. Registration for competitive
interest rate auction:
Order
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Amount
In
number
In
words
1
2
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3
4
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Total
We would like to undertake to duly
make payment of the Government Bond purchase and fully comply with provisions
in the Regulation on the auction of Government's foreign currency Bonds at the
State Bank issued in conjunction with the Decision No. .............
dated................... of the State Bank's Governor
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COMPETENT
PERSON
(Sign, seal or electronic signature)
THIS PART IS FOR THE SBV ONLY
- Computer code:
- Registration code:
- Lot data:
- Receiving branch:
(Preservation time shall be a year)
Form No. 04/TPCP
THE
STATE BANK OF VIETNAM
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SOCIALIST
REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
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No.:
..
Hanoi,
date...............
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Auction date:
Issue date:
Payment date of annual interests:
Maturity date for the payment of principal, interests of
the due year
To:
Based on the result of the Government's
foreign currency Bonds auction on the date of........, the State Bank of
Vietnam would like to give notice of your result auction as follows:
Interest
rate (%/annual)
Volume
(unit:.......)
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Total:....................................................................................................................................
In
words:...............................................................................................................................
- Volume that do not win the
auction:.......................................................................................
- Winning interest
rate:...........................................................................................................
- The amount of interests paid
on annual
basis:........................................................................
- The payable amount (principal,
interests) of Government Bond at maturity:................................
We would like to request your
good institution to duly make payment and timely receive your Government Bonds
at the Banking Operation Department. In case where your payment is not duly
made, the notice of the auction winning result shall cease its effectiveness
and your institution shall be dealt with in accordance with current provisions.
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AUTHORIZED
BY THE GOVERNOR OF THE STATE BANK
DIRECTOR OF BANKING OPERATION DEPARTMENT
(Sign, seal or electronic signature)